After Nvidia (NVDA) announced the decision to invest up to $100B in OpenAI to promote deployments of data centers and power capacity, which includes a letter of intent for Nvidia to be involved in at least 10 GW of systems, BofA said “the optics of such large investment in a customer will raise questions” until Nvidia clarifies the appropriate accounting treatment. However, the firm sees it as equity investment with OpenAI treated as any other customer and estimates the deal could lead to about $300B-$500B in revenue over time, or roughly a 3-times to 5-times return on investment. While no share is specified, the agreement on the surface raises the competitive risks for other vendors including Broadcom (AVGO) and AMD (AMD), adds the analyst, who keeps a Buy rating and $235 price target on Nvidia shares.
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